EdTech Funding Bounces Back In Q1 2017

EdTech Deals On The Rise For First Time In A Year

It’s always interesting to watch which technology sectors see a rise in funding as the year progresses. AR/VR is the hottest space in technology right now as far as deal funding goes. Unicorns are taking a slide and many news outlets are reporting that it’s getting harder and harder for startups to move from seed funding to series A.

The tech sector with the biggest movement in Q1 2017 has been education technology or EdTech, as we call it here at nibletz.com the voice of startups everywhere else.

CB Insights reports that EdTech funding in both deal flow and dollars raised, took a significant dip in 2016. Now though, it’s on the rise.

“In 2016, the sector’s four-year growth streak dropped off for both deal count and dollars invested. However, ed tech companies raised over 130 funding deals through the first quarter of this year, the highest quarterly deal count for the category in over a year.” They reported.

Leading the pack in EdTech deals are the categories newest unicorns, Age of Learning and Pluralsight. Age of learning took a $1 billion dollar valuation when it raised $150M from ICONIQ Capital this month. Pluralsight took a $1 billion dollar valuation last December, raising $30M in a series C which also included ICONIQ. Capital and Insight Venture Partners also participated in that deal.

2015 was a big year for EdTech. That year saw over 520 companies get funded with nearly $3.4 billion dollars in funding. The biggest quarter (Q4) in 2015 had 105 deals and $1.345 billion in dollars. By comparison, Q1 2017 saw 130 deals at $545 million dollars.

Chinese EdTech company, Xuebajun raised a $100M series C round in January. That was the only company to raise $100 million or more in the EdTech category in Q1. The next biggest deal was Research Gate with a $52.6M dollar Series D round followed by Ednovation which raised $33.15M in a private equity fund.

Most EdTech companies see a rise in sales in Q2. That’s because K-12 schools and Higher Education typically make capital expenditures during the summer. Most school systems also roll their fiscal years over in July, while school is out. That’s one of the reasons that ISTE, the Principal’s Conference and other education organizations hold their big conferences right before the July turn over.